Beats Music

It's official. Apple has just announced their intentions to acquire Beats for $3 billion. The deal will include both streaming music service Beats Music and Beats Electronics. The mammoth deal will see Beats co-founders Jimmy Iovine and Dr. Dre joining Apple.

Our pals at iMore are all over this one. As for us? We can't imagine the Android app for Beats Music going anywhere anytime soon.

Source: Apple PR

Press release below:

CUPERTINO, California—May 28, 2014—Apple® today announced it has agreed to acquire the critically acclaimed subscription streaming music service Beats Music, and Beats Electronics, which makes the popular Beats headphones, speakers and audio software. As part of the acquisition, Beats co-founders Jimmy Iovine and Dr. Dre will join Apple. Apple is acquiring the two companies for a total of $3 billion, consisting of a purchase price of approximately $2.6 billion and approximately $400 million that will vest over time.

"Music is such an important part of all of our lives and holds a special place within our hearts at Apple," said Tim Cook, Apple's CEO. "That's why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world."

"I've always known in my heart that Beats belonged with Apple," said Jimmy Iovine. "The idea when we started the company was inspired by Apple's unmatched ability to marry culture and technology. Apple's deep commitment to music fans, artists, songwriters and the music industry is something special."

Iovine has been at the forefront of innovation in the music industry for decades, and he has been an instrumental partner for Apple and iTunes® for more than a decade. He has produced or collaborated with some of the most successful artists in the history of the iTunes Store®, helping make it the world's number one music retailer. Iovine and Dr. Dre are sound pioneers, artists and entrepreneurs.

Beats Electronics has brought the energy, emotion and excitement of playback in the recording studio back to the listening experience and has introduced an entirely new generation to premium sound entertainment. Beats Music was developed by a team of people who have each spent their entire career in music and provides music fans with an incredible curated listening experience.

"Music is such an important part of Apple's DNA and always will be," said Eddy Cue, Apple's senior vice president of Internet Software and Services. "The addition of Beats will make our music lineup even better, from free streaming with iTunes Radio to a world-class subscription service in Beats, and of course buying music from the iTunes Store as customers have loved to do for years."

In just five years since launch, the Beats "b" has become the brand of choice in the music and sports worlds, and is the market leader in the premium headphone market. Music superstars including Lady Gaga, Lil Wayne and Nicki Minaj have designed their own customized Beats headphones and speakers. Fashion designers and street artists such as Alexander Wang, Futura and Snarkitecture have collaborated on special limited products, while renowned athletes including LeBron James, Serena Williams and Neymar use Beats as a critical part of their training and game day process. Beats has quickly become part of pop culture in the US and with the acquisition the Beats product lineup will be offered in many more countries through the Apple Online Store, Apple's retail stores and select Apple Authorized Resellers.

Subject to regulatory approvals, Apple expects the transaction to close in fiscal Q4.

Formally established in 2008 as the brainchild of legendary artist and producer Dr. Dre and Chairman of Interscope Geffen A&M Records Jimmy Iovine, Beats Electronics (Beats) comprises the Beats by Dr. Dre family of premium consumer headphones, earphones, and speakers as well as patented Beats Audio software technology and streaming music subscription service Beats Music. Through these offerings, Beats has effectively brought the energy, emotion and excitement of playback in the recording studio to the listening experience and has introduced an entirely new generation to the possibilities of premium sound entertainment.

Beats Music is a subscription streaming music service that focuses on providing a personalized music experience for each user through a unique blend of digital innovation and musical passion. Programmed by a trusted team of well-respected music experts with over 300 years of experience across all genres, Beats Music delivers the right music for any situation, any time, and any preference, personalized to your tastes. The result is an artist-friendly digital music service that does more than simply offer access to music, but one that establishes an emotional connection to it as well.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

Source: Apple

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Reader comments

Apple and Beats finally get deal done at $3 billion

77 Comments

The electronics division is probably the bigger deal, despite it's murky past (Verge had a good story on the whole Monster relationship debacle).

Apple generally sells premium hardware at a premium price and milks in a high profit margin by making good use of marketing, Beats does the same except they don't sell a premium product (not compared to other/older brands, or even recent incumbents like Philips)...

I'm not really sure why Apple thought this was appealing and I do wonder if Jobs would've gone this direction. I really can't wait until they start bundling Beats branded buds and wet get to hear how they make all the difference tho, not.

Maybe it was just about killing an incumbent to their music distribution dominance, like Lala back in the day (bought and buried).

Over-hyped, marketing-driven company buys other over-hyped, marketing-driven company. It makes sense on that level.

What's next for Apple? Buy Bose. They are a perfect fit. Style over substance. Marketing über alles.

Sean "P Diddy" Combs/Puffy/Puff Daddy isn't a rapper. He's a producer. He raps horribly as is evident in his tribute to Biggie Smalls, "I'll be Missing You".

Dre can actually rap but chooses to focus on producing, and ripping off suburban kids too dumb to know better these days.

Funny thing about Dre though is the fact he doesn't write his own raps, was surprised when I read that

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I did not know that. Elton John uses a lyricist, Bernie Taupin, as well. Sometimes the verbal and musical give don't coincide.

I have a former colleague who is a bit of a musician. He's released albums and the like in England but hasn't hit it big. I eventually got around to listening to his music. It's brilliant both is instrumentation and voice. However, his lyrics were horrible. I feel bad for the guy as his lack of lyrical gift is clearly holding him back.

Yeah, I knew about Elton John, its amazing that such talented individual's have this block, I suppose they have to suck at something (no pun intended sir Elton)

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Correct. Dre is a producer first & foremost and he uses writers for his lyrics. The difference between him & other producers who do this (such as Diddy) is that he has a great delivery. He also doesn't produce as much these days as he has also been using ghost producers as well but even those guys say his mixing is so impeccable that he makes the productions his own.
Posted via Android Central App on The Nexus 5

LOL what a waste of money. Come ON Apple! They couldn't figure out a better way to spend that kind of cash? Wow...unbelievable. The downfall continues.

So true. They bought beats for the streaming (at least that's what the analysts are saying) when they have enough cash on hand to just buy Spotify and get the #1 in the business! Plus if they did that, they wouldn't need to worry about the shitty low-margin hardware division.

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That's not what Bloomberg is saying, and I'm more inclined to believe their analysis than that of the comment section of AC

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You mean those $200 plastic Solo headphones that sound like crap really cost almost $200 to make?

You do know the difference between gross and net margin right?

With headphone revenues at 1.1 Billion, Apple could regain it's investment in about 4 years if the headphone bubble doesn't burst.

That's why you and I are commenting on Android Central while Cook is the CEO of Apple, currently the most valuable company in the world. I am sure he has reasons for buy beats, which we will see in time and Apple has over a hundred billion more in the bank. This hardly makes a dent.
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Be careful not to confuse most valuable "brand" with most valuable "company".....

Google was labeled the most valuable brand because the value of it's brnad in the last year rose to $159 billion, compared to $149 billion for Apple (according to one source, BTW - Forbes still has Apple #1).

But in terms of Market Capitalization, Apple's $537.5 billion is MUCH larger than Googles $384.7 billion, but the gap is closing.

Um no, I'll stick with the facts and the most valuable company is the one that would cost me the most to own today.

The one with the best brand - there's plenty of methodology available to be questioned that are well short of conspiracy theories.

Google was declared most valuable company, but Apple has more liquid cash on hand. Almost twice as much disposable income as Google's ~$68b actually.

Part of their problem, though, is that most of it is overseas and they can't bring it back into the US without paying a *huge* amount of taxes, so they're looking for ways to spend it overseas.

Yeh i am talking about Apple's market cap(530+ billion) vs Google's (380+) not BrandZ abstract valuation of brand value. Neither matters anyhow as we are not talking about Google, point is, Apple has more money than most people can fathom and this deal hardly makes a dent.

P.S. before you get angry, Google has tons of money too.

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do you know the kind of credibility that comes along with posting from your mother's basement? it's pretty substantial

I'm not sure we know yet. As an Apple & Android fan, I'm sure there is a good reason to invest more money than any acquisition in their history. Whether it will be a good thing is yet to be seen.

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It was because they recognized that their investment in HTC wasn't likely to net a return.

Dre makes crap headphones and charges premium prices but he's got business savvy.

This just doesn't make sense from any angle except as yet another way for apple to make loads of money off of a brainwashed customer base who's been convinced that the inferior product they're buying is actually worth $300.

So maybe from a business standpoint it actually does make sense, haha.

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Some advice, if you are a bass head and looking at buying some Beats save your cash and go buy from the Bluedio headset range, same thing with MOARRRR bass and less than half the price

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As long as my Beats Music app gets better I'll be happy. No price hikes, forced iTunes integration, forced purchases or anything like that. Maybe a new releases section and a higher selection.

Apple already bought a competing music service once, one that was making waves. Have you heard of Lala lately?

Samsung should sign a deal with Monster®. They make much better headphones than Beats®. They're not the same without Monster's audio technology.

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They're both overpriced... Monster has, ironically, put out some half decent headphones since they broke ties with Beats but neither one has a glowing lineup.

If you want good budget headphones look at some of Phillips offerings, not an established brand like a Senheisser, Beyerdynamic, AKG, etc but they've put out quite a few good IEM, on ear, and around the ear models at $50-300.

V-moda has some good stuff too tho some of their models cater strongly to bassheads, should be right up the alley for anyone looking at Beats tho (only with much more control and better build quality).

I've even found the Skull Candy branded ear buds to be pretty good for the price tag. Good range and decent bass for head phones that cost less than $20.

Skull Candy used to push a lot of dreck but they've been going upmarket lately, I don't know much of anything about their buds and IEM but some of their somewhat recent headphones were solid efforts (Aviators sound good for the $ for instance, tho flimsy and not very isolating). Beats has somehow managed to be consistently terrible for the money they charge despite their massive MASSIVE market share.

Beats and apple both overpriced is it not a match made in heaven (or hell)

Posted from my Nexus 7 2013 or Samsung galaxy S5

I never used Beats Music and now I will never use it. I have never used a Apple product and never will. Its ok let them have Beats its over priced anyway. Google is now the most valuable brand which is much more important then Beats Music LMAO

While Dre giggles heartily and Beats off. I wonder will Crapple say its a first... Since they can't seem to innovate.
"Siri, what overpriced headphones would go best with my overrated mobile device?"

Sent from my Samsung Galaxy Note 3 on T-Mobile via Android Central App

Cool. Hopefully will stay in Apple's walled garden. Maybe now it won't be included as additional bloatware on my,,I mean "ATT's" device. Nothing like getting the next version of Android update and getting 3 or 5 extra little apps along with it while losing none of the previous bloat apps whatsoever. YP Mobile anyone? What? No? Surely you use the uber popular info grabbing ATT Browser Bar? 46 disabled apps and counting so far
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Samsung sucks HTC front dual speakers with Beats is the best to listen to music. That's all you heard.Now Beats suck. Pathetic
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